First published in ITIJ 127, August 2011
The integration of online medical screening into the travel insurance sales process has intensified in recent times due to advances in risk assessment technology. David Robinson looks at what makes for a successful online screening system
The family was getting desperate. Mother, father and daughter had planned a holiday in Turkey this summer; fearing it could be one of their last as a unit. But booking travel insurance for the 78-year-old mother – who had been seriously ill – had turned into a nightmare. Her ailments included angina, osteoarthritis and ischemic heart disease. The family had contacted a raft of leading insurers, but the quotes were exorbitant. A premium of more than £1,100 so the mother could go on holiday was ridiculous. “It was getting to the point where mum might not have been able to go,” the daughter recalls.
At home in the UK, the daughter trawled the web. She found a niche insurer –Fish Insurance – that specialised in pre-existing conditions. To her surprise, she could enter details of her mother’s illnesses online; other insurers had required her to phone. The website then provided her with an on-the-spot quote. To her delight it was £400 – 60-per-cent less than the competition. “When I told mum she’d be coming on holiday with us after all she was over the moon,” the daughter says. “We were all so happy.”
Fish Insurance’s online booking system uses a risk-rating tool created by Healix, a healthcare solutions company. The system utilises medical algorithms to predict and score underwriting risk based on a series of carefully worded health questions. Customers logging onto Fish’s website complete a handful of eligibility questions that – where appropriate – trigger the risk-rating tool. Healix’s IP is essentially a detailed medical questionnaire that seeks to gauge the severity of their condition, and then determine a risk category (Typically from zero to 10). The ‘risk score’ helps the insurer generate a quote, and the customer can complete the purchase online.
It has not always been this simple. Consumers with serious pre-existing conditions, such as a history of cancer or heart problems, have traditionally had to telephone the insurer. Moreover, the premiums have often been huge as insurers sought to cover their backs in the event of a worst-case scenario.
the trend has also been driven by improvements in technology that allow for easier integration of medical screening into customer-facing tools
But Healix’s most recent rating tool – Black Box 2 – has been designed for easy integration into insurer’s websites. “The presentation of the questions is far more web-friendly,” explains Healix Risk Rating’s client services manager Lara Suttie-Sims.
Similar risk rating software providers include Travel and Medical Services, with its TAMIS system, and Mediquote – both of which strive to produce systems that give users a simple and effective purchasing experience and provide insurers with a tool that will reflect their underwriting needs. As Travel and Medical told ITIJ: “Understanding that distruption to the customer’s application must be minimised and that screening should never be viewed as a barier to a sale has driven TAMIS’ development.” Innovative ‘smart technology’, it says, enables insurers and brokers to integrate medical screening seamlessly into their existing sales systems.
“The last few years have seen more customers review and compare a multitude of insurance products to find the one that best fits their needs,” says Mondial Canada’s president and chief executive officer Scott McKellar. “The increasing availability of online medical screening is a response to this trend.” But the trend has also been driven by improvements in technology that allow for easier integration of medical screening into customer-facing tools. “The questionnaires themselves have evolved as well, with clearer wording and direction to help facilitate the process for the end user,” McKellar adds.
Suttie-Sims says Healix is constantly tweaking its system to improve customers’ overall online sales experience. This year, it released Black Box version 2.2. “We recognise how important it is for people to be able to purchase their travel insurance and conduct their medical screening online in the shortest time possible and with the least amount of hassle,” she says.
The latest version allows the user to search for a medical condition by typing any three letters from any part of the name of a condition (i.e. entering ‘ast’ or ‘hma’ will both return asthma as a search result) and common misspellings have been included such as anemia instead of anaemia.
TAMIS offers a similar service. Users of the system benefit from instant upgrades, improvements or adjustments, and, its ever-expanding medical database and risk-rating engine can be updated ‘in seconds’ to reflect medical advances or issues such as civil unrest to ensure each assessment is ‘reflective of the true immediate risk’. A close relationship between Travel and Medical and Specialty Group’s International Medical Screening has allowed the companies to combine their knowledge, and the hope is to very soon enable insurers to benefit from a searchable drug index and synergistic scoring of medications and conditions, and provide the opportunity to link hazardous activities with medical history.
In February, AXA Direct re-launched its website after integrating an updated version of Healix’s system. The move has allowed it to do 100 per cent of its medical screening online, without the need for any telesales. Also this year, retailer Insure&Go integrated Healix’s latest medical risk assessment tool into its web sales channel. “This enhancement maximises our sales opportunities and reduces the chance of us losing business due to a break in the sales process,” says Simon Tagg, IT development manager at Insure&Go. “It also supports our profitability, as online screening is more cost effective than handling quotations through our call centre.”
Yet despite these improvements to the online sales process, the mainstream insurance market remains reluctant to cover more serious pre-existing conditions in certain situations. “The Healix medical screening system produces a risk score that reflects the severity and stability of medical conditions in conjunction with the area of travel,” an AXA spokesperson says. “Typically, we would not cover somebody who has had a number of heart attacks and was planning to travel the US. However, we may cover somebody with angina travelling to France. It depends on the severity and stability of the health conditions.”
In certain situations, AXA Direct refers customers it deems as ‘high risk’ to specialist provider Goodtogoinsurance, which launched in September last year. Like Fish Insurance, Goodtogoinsurance specialises in providing travel insurance to people with pre-existing medical conditions. It has no age limits, and also uses Healix’s technology to aid in the medical screening process.
“The company aims to provide affordable cover for conditions that other insurers shy away from,” says managing director Iain Sykes. Its customers include people that have had cancer, heart attacks, or strokes, as well as people undergoing chemotherapy or who have been diagnosed with HIV.
“The levels of cover available to those with pre-existing conditions slowly increases every year and many insurers are covering more serious medical conditions than before,” Sykes says. “However, there are still very few specialist providers that are able to cover very high-risk travellers with no age limits. As a result, a fair proportion of our customers are referred by mainstream providers who have not been able to offer cover for reasons of health or age.”
“The levels of cover available to those with pre-existing conditions slowly increases every year and many insurers are covering more serious medical conditions than before,”
Aviva Travel Insurance has also enhanced its online ‘quote and buy’ journey, which aims to make it easier for customers to purchase travel insurance. Said Kate Niven, a senior travel underwriting manager at the company: “The introduction of online medical screening ensures [we] offer greater flexibility around [our] underwriting criteria and means new business customers can search for and select the name of their pre-existing medical condition and fully medically screen for themselves during a single transaction.” Only site users with more complex medical conditions will need to contact the insurer to complete the buying process, she added.
Another specialist supplier of travel insurance for people with pre-existing medical conditions in the UK is AllClear Insurance Services. In December last year, it launched AllClear Options, the UK’s first specialist travel insurance comparison site. The site aims to gives customers with medical conditions the ability to choose and compare deals. “Customers can go straight to the AllClear Options website, input their medical conditions and obtain quotes from a range of leading specialist medical travel insurance providers,” says Chris Blackman, head of product development at AllClear. “With just one screening, we can match the customer’s particular conditions with those products that best meet their needs at the best price,” he says.
This ease of use and also access to the online medical screening function contained within travel insurers’ websites is something that does, however, vary between different sites. While some ask just four or five basic trip-related questions before beginning their online medical questioning, others ask for the user’s name, address, and even car and home contents renewal dates before asking their first medical-related question. This key idea of keeping the process simple is lauded by insurers including Goodtogoinsurance, who say that by keeping the online purchasing process simple and efficient, ‘there is no need for customers to stop or break away from the buying process, for instance to make a phone call or go off to another site’. Keeping the screening and sales process seamless has shown to improve conversion rates and, ultimately, impact insurers’ bottom line. “If a customer is unable to complete their purchase quickly online, you are far more likely to lose them,” says Sykes. The integration of online medical screening has been extremely successful for the company, who say 66 per cent of its policies are sold online. Successful online medical screening also saves insurers money by allowing policies to be sold to medically impaired travellers 24 hours a day, seven days a week without the expense of keeping a call centre open for long hours.
Peter Dingle, commercial director at Europ Assistance in the UK, agrees that web-based online solutions for medical screening mean that the entire sales process is quicker and more efficient for the customer. “In addition,” he says “The ability to include and assess a wide range of conditions means that the majority of customers do not need to be referred for manual underwriting.”
Taking lessons from others
Canada, with its legions of well-heeled senior citizens fleeing to the US every year to escape the country’s freezing winters, has a well-developed travel insurance market for customers with pre-existing conditions. It provides a useful test case on how this growth market might develop in the UK.
Many Canadian insurers claim they will cover pre-existing conditions, but only if they are stable and controlled according to tight definitions. Leading insurers like Mondial and GMS Insurance require customers to complete detailed questionnaires to determine whether they are eligible to buy travel insurance online and to weed out people with more severe pre-existing conditions.
As a result, many Canadian travellers with pre-existing conditions – including elderly travellers – buy cover from just a handful of insurers, such as RBC Insurance, Travel Guard and Etfs, which target products at their demographic. But such companies remain well-established players and provide travel insurance to a wide range of customers – not just the old and infirm. In fact, Canada has very few specialist insurers that primarily focus on customers with pre-existing conditions. There may be a reason for this.
Businesses that have targeted this area of the market in the past have struggled, according to Vancouver-based insurance industry consultant Dr Colin Plotkin. “Many companies providing insurance for pre-existing conditions have fallen by the way side [in North America] for a number of reasons,” he says. “Emergency medical travel insurance targets a specific segment of the public, and is therefore devoid of the basic requirements in insurance, that of a dilutionary factor. In other words, there are insufficient people contributing to a pool of money to fund the level of claims that will flow as an absolute, from claims relating to pre-existing conditions,” Dr Plotkin says. “Irrespective of whatever premium is charged to cover a pre-existing eventuality, be it £10, £20, or £30 for a week, two weeks, or a month of travel to the US, a single claim of US$500,000 can never be balanced by an equivalent premium income. This also assumes that there are people rich enough, and desperate enough, to travel in order to fund the premiums, which are ten or more times that of the cost of the plane ticket.”
Canada has very few specialist insurers that primarily focus on customers with pre-existing conditions
In the UK, insurers selling travel insurance on the web for people with serious pre-existing conditions is a relatively recent phenomenon. Goodtogoinsurance began trading in September 2010, while the AllClear Options website launched in December. Fish Insurance started selling travel insurance in January. AllClear – which claims it goes further than its rivals in terms of severity of medical risk that can be accepted on a travel insurance policy – has seen its business triple in size in the last three years, driven by strong growth in online sales of 45 per cent year-on-year. However, as the number of specialist travel insurers that cater to customers with pre-existing conditions in the UK rises, the Canadian example may provide a salutary warning to the UK sector and booming online sales industry.
Fish Insurance operations director John Garrard concedes that travel insurance is a ‘tricky business to underwrite’ because medical repatriation can – occasionally – be extremely expensive. But he maintains that the volume of customers the company pulls in balances the risk of the odd huge payout. “Our main concern has always been whether our premiums reflect the losses and we remain confident that we provide insurance at the right price for the risks that customers come to us with, whilst still providing adequate cover,” he says.
Other specialist insurers, such as InsureCancer, don’t offer online medical screening, as the cover they provide is uniquely tailored to each customer’s condition, making it entirely suitable for the traveller’s needs and often more affordable, with risks based on very precise technical medical underwriting. Said Krish Shastri, the company’s founder: “As a cancer patient’s response to treatment is individual and unique, it is not possible to simply screen and pigeonhole patients to price risk. This is particularly the case with those patients with advanced cancer in palliative care.”
“there are insufficient people contributing to a pool of money to fund the level of claims that will flow as an absolute, from claims relating to pre-existing conditions”
It’s not denied that pre-existing conditions will continue to provide a challenge to travel insurers, but how they’re dealt with going forward may determine how well the travel insurance industry fares in its quest to provide an efficient and cost-effective sales process in the form of online medical screening. As AllClear’s Chris Blackman said to ITIJ: “The sharp rise in the number of people with Alzheimer’s and diabetes type 2 and other pre-existing conditions should ensure that the kind of specialist travel insurance we provide sees strong growth for many years to come. With the web continuing to dominate as the preferred sales channel for the travel insurance market, integrated on-line medical screening will continue to form an important part of the customer journey, enabling a one-stop shop for the whole policy sales process.” Whether seeking a standard travel policy or more specialist cover, customers being able to complete the medical screening process in their own time, in a more private manner, without the pressure of a phone call will always be a more popular sales route. With the advent of advanced online medical screening, this is becoming increasingly possible for a growing number of people.